Crypto exchange Bybit is diving deeper into yield-generating products. This time, the trading platform has announced a partnership with Avalon Labs to bring Bitcoin-based yield to users using a unique CeDeFi structure.
CeDeFi simply refers to a hybrid model that merges elements of centralized and decentralized finance. Furthermore, the partnership means Avalon’s protocol now powers part of Bybit Earn.
Avalon Labs’ institutional layer is now live on @Bybit_Official Earn, redefining how Bitcoin lending and yield work within the centralized exchange ecosystem.
New yield opportunities are unlocked for Bitcoin holders on Bybit by leveraging Avalon’s fixed-rate institutional… pic.twitter.com/KTHeKvnXJp
— Avalon Labs
(@avalonfinance_) April 15, 2025
This move opens up opportunities for users. It means they earn yield on their Bitcoin by taking advantage of arbitrage opportunities in Avalon’s fixed-rate institutional lending platform. In simple terms, Bitcoin holders do not have to sell their BTC to make it work for them.
Avalon brings a new twist to Bitcoin.
Avalon is taking Bitcoin beyond a long-term bet. Prior to this time, BTC holders merely anticipated profit from a price surge. However, holding BTC could go either way, as prices can fluctuate all the time.
But Avalon is showing that BTC can do more than wait. Avalon blends traditional finance with crypto innovation, expanding Bitcoin’s potential. Bitcoin is powerful, being permissionless and censorship-resistant and totally yours. However, it has very little day-to-day use.
How It Works: The Yield Engine Behind the Scenes
1/ What is $FBTC?$FBTC is a 1:1 Bitcoin-pegged asset with over $1.25B in TVL. It brings Bitcoin into DeFi, enabling it across Ethereum and other chains.
2/ Avalon’s Role in the Stack:$FBTC is used as collateral on Avalon’s…
— Avalon Labs
BTC holders can not get a loan from a bank using BTC as collateral. Plus, holders have to sell their BTC when in need of liquidity. Avalon is addressing that, making Bitcoin usable and more lucrative without compromising its fundamentals.
Avalon has created a system that makes Bitcoin more than just something users hold. Now users can borrow cash without selling their BTC. Plus, they can also earn returns on it. The idea is to turn Bitcoin into a productive asset like real estate or stocks.
We’re proud to launch our institutional Bitcoin lending product – an overcollateralized, on-chain credit facility built for scale, security, and transparency.
With stable rates, flexible terms, and top partners onboard, we’re unlocking liquidity for BTC-holding institutions.… pic.twitter.com/F0zMETazsD
— Avalon Labs
Avalon is building out something called BTCFi, or Bitcoin DeFi. This means using your Bitcoin for things like lending, borrowing, and earning yield without selling it and without needing traditional banks.
Interestingly, Avalon has secured partnerships with massive financial institutions and has secured over $2 billion in credit. It bridges CeFi and DeFi, giving users access to stablecoins (like USDT) by borrowing against their Bitcoin at fixed rates.
Disclaimer
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